Mercedes-Benz is understood to be working on high-riding versions of its C-Class and/or E-Class wagons as part of an SUV model expansion that could also take in a $500,000 super luxury model.

Speaking at the launch of the Mercedes-Benz GLC ? the first mid-sized SUV from the German brand to be sold in Australia - senior executives confirmed a wagon with mild styling tweaks is being actively discussed.

"If you take the SUVs as a whole ? it's already such a big part of the portfolio ? it's a love story that's going to continue," said Mercedes-Benz member of the board of management Ola Kallenius, adding that a sportier-looking Coupe version of the GLC would arrive in 2016.

If wagon-based Mercedes-Benz SUVs were to happen they would compete with the likes of the Audi A4 Allroad, Audi A6 Allroad and Volvo XC70.

"We are looking at everything," said Mercedes vice president of sales and product management, Matthias Luehrs. "We are studying this at the moment but it's not confirmed. We are looking obviously at E-Class and C-Class."

Mercedes-Benz research and development boss Professor Doctor Thomas Weber said the German car maker was exploring various niches.

"SUVs are the hottest cars around the world ? we see niches in some areas," said Weber. "Are there more opportunities? Why not? I trust in SUVs."

Mercedes-Benz director of exterior design, Robert Lesnik, said a wagon-based SUV would be "something interesting".

But he cautioned that if it were to happen it would need the 4Matic four-wheel-drive system to ensure respectable off-road performance.

"It has to be authentic with 4Matic [if it were to happen]," said Lesnik.